Excise Taxes

Act: Excise Tax Act
Regulation: Not applicable.

To Whom Does This Apply?

When goods are manufactured in Canada, excise tax is payable at the time the goods are delivered to the purchaser. When they are imported, excise tax is payable by the importer, at the time the goods are imported.

Summary

There are two types of federal levies on products manufactured or produced in Canada: Excise taxes and Excise duties.

Excise taxes are charged on:

• heavy automobiles; 
• automobile air conditioners;
• certain petroleum products;
• some insurance premiums.

Note: The excise tax on jewellery was eliminated, effective May 2, 2006.

The Excise Tax Act sets out the rates of tax for each of these goods.

Under certain circumstances, you may be able to claim a refund of the excise taxes you paid. Manufacturers need an excise tax licence (“E” licence) unless they qualify as a small manufacturer. You qualify as a small manufacturer if your total annual sales are not more than $50 000.

A wholesaler licence ("Wholesaler" licence) allows you to buy goods for resale without paying excise taxes. You may qualify for a "W" licence under certain limited circumstances, thereby enabling you to buy goods exempt of excise tax and to collect and remit the excise tax at the time you sell the goods.

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Quebec Contact(s):
See National Contact.

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National Contact(s):
Excise Tax Program
Canada Revenue Agency
Ottawa, Ontario  K1A 0L5
Toll-free (information): 1-866-330-3304
Toll-free (publications): Excise Tax forms: 1-877-432-5472
Web site: http://www.cra.gc.ca/tax/technical/etsl-e.html